Magnum-maker sees heatwave boost ice cream sales
Surging demand for ice cream in the summer heatwave helped Magnum-to-Marmite giant Unilever post higher third-quarter sales.
The consumer goods giant said sales growth picked up across all divisions in the third quarter, at 3.8% overall to 12.5 billion euros (£11 billion), with sales up 1.4% across Europe as the region basked in a prolonged hot weather spot.
Its update marks the first set of figures since Unilever’s embarrassing relocation U-turn saw the group ditch plans to move its corporate headquarters from London to Rotterdam following investor pressure.
The group’s director and executive vice president for reward, Peter Newham, admitted in a Commons committee hearing on Tuesday that the group had failed to talk to shareholders in the run-up to its ill-fated decision to switch to the Netherlands.
But under-fire chief executive Paul Polman reportedly told an audience at the launch of the One Young World conference on Wednesday that he believed the proposal had been the right thing to do.
He said: “One of the things with leadership is, is it the harder life or is it the easier one? We would like always to propose the harder, right one and go for that and not the easier one.”
Unilever’s third-quarter results showed that, of the 3.8% underlying sales growth, 1.4% came from higher prices.
The group stripped out Argentina figures, as inflation in the country would have skewed organic growth.
It thanked strong growth in ice cream sales for a boost in the quarter, with new launches such as its Magnum praline and Kinder ice cream selling well in the hot weather.
In the UK, it said good ice cream sales were partially offset by competition in the fabric care market.
Mr Polman said: “Growth accelerated in the third quarter across all divisions.
“We were able to increase prices whilst still maintaining good volume growth, which reflects the strength of our brands and quality of our innovation programme.”
The group confirmed its annual target to reach 3% to 5% underlying sales organic growth.
Shares fell 2% after the update.
Martin Deboo, an equity analyst at Jefferies, said: “Pricing accelerated, but will need to, given commodity pressures in the second half.”